Aurizon mulls network stake sale

Ahead of the finalisaiton of the sale of a stake in Fortescue Mining's infrastructure assets, Aurizon - the former Queensland Rail - has flagged the selldown of equity in its railway networks business, which could free up billions dollars of capital.

A financial restructure will result in a wholly owned subsidiary, Aurizon Network Pty Ltd, holding some $3 billion of debt, which would create a ‘‘transparent and sustainable financial structure’’ with debt placed against the regulated Central Queensland Coal Network and with the ability to further diversify funding sources, it told investors earlier today.

The new structure would provide flexibility to consider other funding initiatives for Aurizon, it said which would allow it to ‘‘introduce a minority equity interest in Aurizon Network, allowing Aurizon to redeploy capital from the regulated business into either capital management initiatives or funding value accretive growth projects to the extent that such opportunities are identified’’.

Along with the prospect of buying a minority stake in the infrastructure assets of Fortescue Mining, which is on the block, the re-financing comes as speculation continues that the Queensland government is likely to sell its remaining equity in Aurizon.

Rather than this being placed into the market, Aurizon could have the option of buying and cancelling this block of shares, if it has sufficient funds on hand.

In March, the Queensland government cut to 8.9 per cent from 18.2 per cent its shareholding in the company.